Models of Speculative Attacks and Crashes in International Capital Markets

57 Pages Posted: 26 Jul 2012 Last revised: 3 Mar 2014

See all articles by Giancarlo Marini

Giancarlo Marini

University of Rome Tor Vergata - Faculty of Economics

Giovanni Piersanti

University of Rome Tor Vergata - Department of Economics and Law

Date Written: July 24, 2012

Abstract

Currency and financial turmoils in international capital markets have been the focus of an extensive theoretical research which started around 30 years ago. This paper provides a synthetic overview of this theoretical modeling. We analyze the basic analytical framework corresponding to the dominant theoretical approaches, and discuss their extensions to include the …financial sector, contagion across markets and countries, capital ‡flows and borrowing constraints, strategic interactions among agents and equilibrium selection. In the final section we focus on the relevant policy issue of crisis prevention and optimal foreign regime choice in a world of full …financial integration.

Keywords: Exchange Rate Regimes, Speculative Attacks, Currency Crises, Financial Crises, Global Games

JEL Classification: F30, F31, F32,F33, F41, G01, C70

Suggested Citation

Marini, Giancarlo and Piersanti, Giovanni, Models of Speculative Attacks and Crashes in International Capital Markets (July 24, 2012). CEIS Working Paper No. 245, Available at SSRN: https://ssrn.com/abstract=2116360 or http://dx.doi.org/10.2139/ssrn.2116360

Giancarlo Marini (Contact Author)

University of Rome Tor Vergata - Faculty of Economics ( email )

Via Columbia n.2
Rome, 00100
Italy

Giovanni Piersanti

University of Rome Tor Vergata - Department of Economics and Law ( email )

Via Columbia n.2
I-00133 Rome
Italy

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